In re Estate of Speakman

2017 Ohio 7808

• Court: Ohio Court of Appeals
• Decided: September 25, 2017
• Docket: CA2016-11-017
• Status: Published

Opinion

[Cite as In re Estate of Speakman, 2017-Ohio-7808.]

IN THE COURT OF APPEALS

TWELFTH APPELLATE DISTRICT OF OHIO

FAYETTE COUNTY

IN THE MATTER OF THE ESTATE OF: :

JUDITH A. SPEAKMAN : CASE NO. CA2016-11-017

: OPINION 9/25/2017 :

:

APPEAL FROM FAYETTE COUNTY COURT OF COMMON PLEAS PROBATE DIVISION Case No. PE20150253

Kiger & Kiger, James A. Kiger, 132 South Main Street, Washington C.H., Ohio 43160, for appellant, Diana Charalambous

Jess C. Weade, 220 East Market Street, Washington C.H., Ohio 43160, for appellees, Frederick and Nancy Pitzer, Executors

RINGLAND, J.

{¶ 1} Appellant, Diana Charalambous, appeals the decision of the Fayette County

Probate Court overruling her exceptions to the inventory of assets filed by appellees,

Frederick and Nancy Pitzer, Executors of the Estate of Judith Speakman.

{¶ 2} The facts of this case are largely undisputed. Speakman died testate with a will

designating appellant as the beneficiary of one-half of the estate property. The remaining

half was to be divided in equal shares between Speakman's two nephews. Fayette CA2016-11-017

{¶ 3} Speakman had a personal bank account with Huntington Bank.1 Speakman

also maintained a Transfer-on-Death ("TOD") account with Merrell Lynch that listed appellant

as the beneficiary upon Speakman's death. For purposes of this appeal, the TOD account

contained the following limitation:

If the Account Owner becomes incompetent, a court appointed guardian or conservator, or an agent acting under durable power of attorney that is satisfactory to MLPF&S, may give instructions on the TOD Account to the extent of their authority. A court appointed guardian or conservator, or agent acting under a durable power of attorney, shall not have the authority to enter into, alter or revoke the Agreement and designation of Beneficiaries, except by obtaining an authorizing order from a court of competent jurisdiction and presenting a certified copy of that order to MLPF&S.

{¶ 4} In 2015, Speakman became ill and was moved into a nursing home. On April

17, 2015, Speakman executed a durable power of attorney naming Frederick and Nancy

Pitzer as attorneys-in-fact. As of April 30, 2015, the TOD account contained $113,448.33.

{¶ 5} On May 21, 2015, Fredrick withdrew $50,000 from the TOD account and

deposited the sum into Speakman's Huntington account. Fredrick explained at trial that he

withdrew those funds from the TOD account because Speakman's Huntington account

contained only $13,000 and additional funds were needed for Speakman's health care costs

and nursing home arrangement.

{¶ 6} Frederick had also placed Speakman's house on the market. Speakman's

home sold on August 7, 2015 and the funds were deposited in her Huntington account.

{¶ 7} On August 20, 2015, Fredrick withdrew the remaining assets from the TOD

account. Fredrick stated that he withdrew the remaining funds from the TOD account

because the account "was losing money." Those funds were also deposited in the

Huntington account.

1. We will refer to the Huntington accounts in the singular, as the number of Huntington accounts is immaterial. -2- Fayette CA2016-11-017

{¶ 8} Speakman passed away on November 20, 2015. Acting as Executors, Fredrick

and Nancy prepared an inventory of the estate. Appellant wrote a letter addressing concerns

with the former TOD funds. The letter was construed as an objection to the inventory.

Appellant argued that the money withdrawn from the TOD account was improperly removed

and comingled with probate property. Appellant maintained that the money withdrawn from

the TOD account should not be considered probate property and should have remained TOD

property and transferred to her as the beneficiary. The trial court held a hearing on the

objection. Following additional briefing by the parties, the trial court found that the money

withdrawn from the TOD account was probate property and therefore subject to distribution

under the terms of the will. Appellant now appeals the decision of the trial court, raising two

assignments of error for review.

{¶ 9} Assignment of Error No. 1:

{¶ 10} THE TRIAL COURT ERRED AS A MATTER OF LAW IN OVER-RULING [sic]

APPELLANT'S OBJECTIONS TO HER DECEDENT AUNT'S INVENTORY.

{¶ 11} Assignment of Error No. 2:

{¶ 12} THE DECISION OF THE PROBATE COURT OF FAYETTE COUNTY

OVERRULING APPELLANT'S OBJETIONS [sic] TO JUDITH SPEAKMAN'S (DECEDENT)

INVENTORY IS AGAINST THE MANIFEST WEIGHT OF THE EVIDENCE.

{¶ 13} Appellant argues the trial court erred by approving the inventory of the estate.

The issues in this case focus on the TOD funds. Since appellant was the named beneficiary

of the TOD account, she would be entitled to the entirety of those nonprobate funds upon

Speakman's death. However, because those funds were transferred into Speakman's

personal accounts, those funds became probate property upon her death. Pursuant to the

terms of Speakman's will, appellant would receive half of the probate property, but would

share the remaining half with Speakman's two nephews. -3- Fayette CA2016-11-017

{¶ 14} Appellant raises two arguments on appeal. First, appellant argues that the

TOD account contract contained a clause limiting the holder of a power of attorney from

altering or revoking the TOD account except by court order. Second, appellant argues that

the power of attorney failed to preserve Speakman's reasonable estate plan contrary to the

provisions of the Uniform Power of Attorney Act, specifically R.C. 1337.34(A)(4). We will

address both arguments.

TOD Account Language

{¶ 15} Appellant first argues that the trial court erred by approving the inventory of the

estate based on the existence of a clause contained in the TOD account contract.

{¶ 16} In reviewing a contract, the court's primary role is to ascertain and give effect

to the intent of the parties. Baruk v. Heritage Club Homeowners' Assn., 12th Dist. Warren

No. CA2013-09-086, 2014-Ohio-1585, ¶ 60. In ascertaining the intent of the parties, the court

must presume that the intent resides in the language the parties chose to employ in the

agreement. Towne Dev. Grp., Ltd. v. Hutsenpiller Contrs., 12th Dist. Butler No. CA2012-09-

081, 2013-Ohio-4326, ¶ 17.

{¶ 17} "A contract that is, by its terms, clear and unambiguous requires no

interpretation or construction and will be given the effect called for by the plain language of

the contract." Cooper v. Chateau Estate Homes, L.L.C., 12th Dist. Warren No. CA2012-07-

061, 2010-Ohio-5186, ¶ 12. A contract is ambiguous if its provisions are susceptible to two or

more reasonable interpretations. Id. Whether a contract's terms are clear or ambiguous is a

question of law for the court. O'Bannon Meadows Homeowners Assn., Inc. v. O'Bannon

Properties, L.L.C., 12th Dist. Clermont No. CA2012-10-073, 2013-Ohio-2395, ¶ 20.

{¶ 18} "Often the intended meaning of a word or phrase may be clear when that word

or phrase is considered in the context of other words or phrases in the contract." EnQuip

Techs. Grp. v. Tycon Technoglass, 2d Dist. Greene No. 2011-CA-39, 2012-Ohio-6181, ¶ 16. -4- Fayette CA2016-11-017

Thus, the intended meaning of any part of the parties' contract should be determined in light

of the whole contract. Dayton Outpatient Ctr., Inc. v. OMRI of Pensacola, Inc., 2d Dist.

Montgomery No. 26169, 2014-Ohio-4105, ¶ 13.

{¶ 19} As noted above, the TOD account contract contained the following provision:

If the Account Owner becomes incompetent, a court appointed guardian or conservator, or an agent acting under durable power of attorney that is satisfactory to MLPF&S, may give instructions on the TOD Account to the extent of their authority. A court appointed guardian or conservator, or agent acting under a durable power of attorney, shall not have the authority to enter into, alter or revoke the Agreement and designation of Beneficiaries, except by obtaining an authorizing order from a court of competent jurisdiction and presenting a certified copy of that order to MLPF&S.

{¶ 20} The trial court found that the power of attorney did not violate the provision

contained in the TOD account contract because Speakman was never found incompetent

and never changed the transfer on death beneficiary of the TOD account.

{¶ 21} Appellant disputes the trial court's interpretation, and instead claims that the

provision is much broader in scope. Emphasizing the second sentence of the provision,

appellant argues that an attorney-in-fact needs a court order to withdraw any funds from the

TOD account.

{¶ 22} Based on our review, we agree with the interpretation of the trial court. The

second sentence of the relevant provision does require an "authorizing order" prior to the

alteration or revocation of the TOD account. However, when the clause is taken in proper

context and in light of the entire contract, it is clear that appellant's position is misguided.

The provision that appellant relies on is constrained to instances in which the account owner

becomes incompetent. See Drone Consultants LLC v. Armstrong, 12th Dist. Warren Nos.

CA2015-11-107 and CA2015-11-108, 2016-Ohio-3222, ¶ 22 (courts should read contracts as

a whole and gather the intent of each part from the whole). It is undisputed that Speakman

-5- Fayette CA2016-11-017

was never declared incompetent. Thus, appellant's reliance on the contractual language in

the TOD account is misplaced. Appellant's argument with respect to the language of the

contract is without merit.

Uniform Power of Attorney Act

{¶ 23} Appellant also argues that Frederick and Nancy violated terms of the Uniform

Power of Attorney Act. A power of attorney "is a written instrument authorizing an agent to

perform specific acts on behalf of his principal." Testa v. Roberts, 44 Ohio App.3d 161, 164

(6th Dist.1998). Ohio adopted the Uniform Power of Attorney Act in March of 2012.

McFarren v. Emeritus at Canton, 5th Dist. Stark No. 2013CA00040, 2013-Ohio-3900, ¶ 17.

{¶ 24} R.C. 1337.36 details the persons who may petition a court to construe a power

of attorney or review the agent's conduct. Among those persons listed in the statute is a

"person named as a beneficiary to receive any property, benefit, or contractual right on the

principal’s death." R.C. 1337.36(A)(6).

{¶ 25} The duties of an agent under the Act are provided in R.C. 1337.34, which

states:

(A) Notwithstanding provisions in the power of attorney, an agent that has accepted appointment shall do all of the following:

***

(4) Attempt to preserve the principal's estate plan to the extent actually known by the agent if preserving the plan is consistent with the principal's best interest based on all relevant factors, including all of the following:

(a) The value and nature of the principal's property;

(b) The principal's foreseeable obligations and need for maintenance;

(c) Minimization of taxes, including income, estate, inheritance, generation-skipping transfer, and gift taxes;

(d) Eligibility for a benefit, a program, or assistance under a -6- Fayette CA2016-11-017

statute or regulation.

{¶ 26} Based on our review, we find the trial court's decision does not address

whether appellees complied with R.C. 1337.34 with respect to Speakman's estate plan.

Therefore, we remand this matter for further findings of fact. See, e.g., Smith v. Smith, 12th

Dist. Clermont No. 2017-Ohio-7463, ¶ 19 (trial court findings necessary to facilitate

meaningful appellate review). We recognize that appellant's argument largely centered on

the contractual dispute detailed above, however the issue was disputed by the parties and

evidence was adduced as to Speakman's estate plan. At trial, there was evidence that

Speakman set up the TOD arrangement prior to her final illness and that she wanted the

funds from the TOD account to go to appellant. There was also evidence that Frederick was

aware of the TOD arrangement, but nevertheless withdrew funds from the TOD account and

deposited the money into Speakman's individual account. Ultimately, the funds in the

individual account became probate property subject to the terms of the will.

{¶ 27} In remanding this matter to the trial court, we emphasize that there is no

allegation that appellees acted out of self-interest in the transfer of the funds from the TOD

account to the Huntington account. The evidence at trial was that Speakman's individual

account had fallen to $13,000 while she was still alive and in nursing care. The funds in the

TOD account were still Speakman's property while she was alive and appellant did not have

any right to control the funds in the TOD account. Although the power of attorney provided

Frederick and Nancy with authority to manage Speakman's assets, they were obligated to act

in accordance with the power of attorney agreement and the terms of the Ohio Revised

Code. As previously noted, R.C. 1337.34 requires a power of attorney to "attempt to

preserve the principal’s estate plan to the extent actually known by the agent if preserving the

plan is consistent with the principal's best interest based."

{¶ 28} Frederick testified that he removed $50,000 from the TOD account for -7- Fayette CA2016-11-017

anticipated future health care and nursing home expenses and placed those funds in the

Huntington account. Following the initial withdrawal of money from the TOD account,

Speakman's house was sold and the proceeds from the sale were deposited into the

Huntington account. Thereafter, Frederick testified that he withdrew the balance of the TOD

account because the account was "losing money." As this court is not a finder of fact, we

remand this matter, direct the trial court to determine whether Frederick acted consistently

with R.C. 1337.34 in the withdrawal of the TOD funds, and take any necessary action

consistent with that determination. Accordingly, we reverse the decision of the trial court and

remand this matter for further proceedings.

{¶ 29} Judgment reversed and remanded.

S. POWELL, P.J., and M. POWELL, J., concur.

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